Miller + Coors = bland beer, now in greater quantities.
This week SABMiller and Molson Coors agreed to combine their US operations. This undoes a substantial chunk of the mergering that Molson and Coors did just two years ago, and gives SABMiller — which, of course, makes Miller beer — an even bigger footprint in the US.
And who cares? Probably not beer drinkers. The deal is intended to pit the Miller/Coors group against the Budweiser franchise of Anheuser-Busch, but this entire segment of the beer market is moribund, not least because it centers around very light, very bland beers. Growth, in recent years, hasn’t come from brands like Bud or Miller Lite or Coors, but from microbrews and specialty imports.
This may not be fair, but honestly, the business side of this deal bored me from the moment I heard about it. The best take I’ve seen on the beer-drinking side of the deal comes from this Deal Journal interview with beer critic Don Russell, a.k.a. Joe Sixpack:
Category: Consumer goods, DealsCoors vs. Miller: Joe Sixpack’s Taste Test
Deal Journal: What do you make of the merger announced today? From a beer drinker’s perspective, which tastes better?
Don Russell: They may as well be the same beer. [...]
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So all Miller can do is buy up Other Smaller beer Companies. sad
Precisely, Bryan — but I’m afraid this is what you get when you so thoroughly saturate a market. It’s a little like the Big 3 car makers: even when they want to do something big to shake things up, they have a *lot* of buyers who are expecting the update of their favorite F-150, Tahoe, or whatever right on schedule. If Miller and Bud and Coors drinkers *wanted* something different, it wouldn’t be hard for them to wander further down the beer aisle to buy Heineken or Bass or Anchor Steam or a local brew or whatever — but that’s not what they want.
The problem, of course, is that there’s not much growth in that segment of the business — which helps to explain why the big brewers have continued to buy up niche brands in hopes of expanding their appeal.
For my money, the only (slightly) interesting big brewers are InBev and Scottish & Newcastle (which, if memory serves, is way behind the others in size). The real action in the industry is happening with regional/local/micro-brewers.